Correlation Between Ford and Huntwicke Capital
Can any of the company-specific risk be diversified away by investing in both Ford and Huntwicke Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and Huntwicke Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Huntwicke Capital Group, you can compare the effects of market volatilities on Ford and Huntwicke Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford with a short position of Huntwicke Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Huntwicke Capital.
Diversification Opportunities for Ford and Huntwicke Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Huntwicke is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Huntwicke Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntwicke Capital and Ford is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor are associated (or correlated) with Huntwicke Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntwicke Capital has no effect on the direction of Ford i.e., Ford and Huntwicke Capital go up and down completely randomly.
Pair Corralation between Ford and Huntwicke Capital
Taking into account the 90-day investment horizon Ford Motor is expected to generate 10.35 times more return on investment than Huntwicke Capital. However, Ford is 10.35 times more volatile than Huntwicke Capital Group. It trades about 0.01 of its potential returns per unit of risk. Huntwicke Capital Group is currently generating about -0.21 per unit of risk. If you would invest 1,073 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Ford Motor or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.6% |
| Values | Daily Returns |
Ford Motor vs. Huntwicke Capital Group
Performance |
| Timeline |
| Ford Motor |
| Huntwicke Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Huntwicke Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Huntwicke Capital
The main advantage of trading using opposite Ford and Huntwicke Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Huntwicke Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Huntwicke Capital will offset losses from the drop in Huntwicke Capital's long position.The idea behind Ford Motor and Huntwicke Capital Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Huntwicke Capital vs. BlackRock | Huntwicke Capital vs. KKR Co LP | Huntwicke Capital vs. Apollo Global Management | Huntwicke Capital vs. Brookfield Asset Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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